NCR is to take a $42 million charge against outstanding debts related to business dealings with Credit Card Centre, a distributor of ATM equipment into the US small retailer marketplace.
During 2000, NCR entered into a preferred provider relationship with CCC for entry-level ATM machines. As part of this agreement, NCR provided $16 million of financing, primarily to support infrastructure investments by CCC.
In recent weeks CCC has experienced serious cash flow problems and a sharp drop off in new and existing customers. NCR says CCC's ability to satisfy its financial obligations has become a "significant concern".
The $42 million charge is expected to impact NCR's first quarter 2001 earnings by approximately $28 million after tax.
"Because of the strength and growth of its ATM business in the European and Asian markets, NCR does not currently believe that, apart from this anticipated charge, there will be any material revenue or earnings impact to the financial self-service business, or to the overall company, for the year 2001," says the vendor in a statement.